German construction industry grows at fast pace

According to Markit PMI, the German construction sector grew at a faster pace during February 2017, following a slowdown at the start of 2017 that was linked to the cold weather.

Activity across the residential, commercial and civil engineering categories increased more quickly, with firms reporting the second-sharpest rise in new work since the survey began in 1999. Employment and purchasing both increased at faster rates, while the 12-month outlook remained historically strong.

Adjusted for seasonal factors, the headline Purchasing Managers’ Index® (PMI®) rose from a five-month low of 52.0 in January to 54.1 in February. The latest figure signalled a strong overall rise in German construction activity, and extended the current survey-record sequence of expansion to 25 months. Some firms commented that business had recovered following a very cold January.

Growth of construction activity was broad-based across the residential, commercial and civil engineering sectors. Moreover, all three posted faster expansions than in January. The strongest growth was seen in civil engineering, which saw the second-sharpest increase in activity in nearly six years.

The construction sector was boosted by a sharp expansion in new work in February. New business rose for the fourth month running.

With both new work and total activity rising in February, construction firms purchased a greater quantity of inputs. The rate of expansion quickened from January and was broadly inline with the solid trend pace shown over the current 19-month sequence of growth. As a result, suppliers’ delivery times continued to lengthen significantly. Construction firms also stepped up recruitment to meet workloads, while the use of subcontractors also increased, having declined in January.

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